Legal Environment of Business

BUS 7305

Specific Relief Act, 1872

 Specific Relief Act, 1877
To be continued from previous lecture…

Injunction when refused, u/s. 56 of the SR Act, 1872.

s. 56 of the SR Act, 1872. An injunction cannot be granted-
(a) to stay a judicial proceeding pending at the institution of
the suit in which the injunction is sought, unless such
restraint is necessary to prevent a multiplicity of
proceedings;
(b) to stay proceedings in a Court not subordinate to that
from which the injunction is sought;
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(c) to restraint persons from applying to any
legislative body;
(d) to interfere with the public duties of any
department of the Government, or with the
sovereign acts of Foreign Government;
(e) to stay proceedings in any criminal matter;
(f) to prevent the breach of a contract the
performance of which would not be specifically
enforced;
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(g) to prevent, on the ground of nuisance, an act of which it
is not reasonably clear that it will be a nuisance;
(h) to prevent a continuing breach in which the applicant has
acquiesced;
(i) when equally efficacious relief can certainly be obtained
by any other usual mode of proceeding except in case of
breach of trust;
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(j) when the conduct of the applicant on his agents has been
such as to disentitle him to the assistance of the Court;
(k) where the applicant has no personal interest in the
matter.
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Injunction to perform negative agreement, u/s. 57 of the
SR Act, 1877
s. 57 of the SR Act, 1877. Notwithstanding section 56,
clause (f), where a contract comprises an affirmative
agreement to do a certain act, coupled with a negative
agreement, express or implied, not to do a certain act, the
circumstance that the Court is unable to compel specific
performance of the affirmative agreement shall not preclude
it from granting an injunction to perform the negative
agreement: provided that the applicant has not failed to
perform the contract so far as it is binding on him.
 Law of Agency Contract
To be continued…
The Contract Act, 1872
Laws relating to some particular type of contract of agency SS:
182-238
S: 182 – Agent and principal defined
 
S: 183 – Who may employ agent
 
S: 184 – Who may be an agent (qualification of principal and agent)
 
S: 185–Consideration is not necessary (its nature is independent of
contract)
 
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S: 186 – Agent’s authority may be expressed or implied
S: 187 – Definition of expressed and implied authority
Example:
X living Dhaka, has shop Chittagong, visit there
occasionally, shop managed by Y and is in the habit of
ordering goods from Z in the name of A for the purpose of
the shop, and of paying for them out of A’s funds with A’s
knowledge. Y has implied authority.
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Authority not implied: A power of attorney authorizing the
holder “to dispose of “certain property in any way he thinks
fit does not imply an authority to mortgage the property.
Case: Malukchand vs Sham Mohan (1890), 14 Bom. 590.
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Husband & wife: the liability of a husband for a wife’s debt

depends on the principles of agency, and the husband can
only be liable when it is shown that he has expressly or
impliedly sanctioned what the wife has done.
Case: Girdhari Lal vs Crawford (1885) 9 All. 147, 155.
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S: 188 – Extent agent’s authority (cannot but lawfully can
extent)
Example: incidental authority may extent, but authority is:
i) to do every lawful thing and
ii) such lawful thing must be necessary or usually done in
the course of such act or business.
Example: due to recovering debt -----
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S: 189 – Agent’s authority in an emergency (agent can sell
goods if it perishable and if it is necessary)

S: 190 – When an agent cannot delegate (Sub-agent/

delegates non protest delegare)
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S: 191 – Sub-agent defined

S: 192 – Representation of principal by sub-agent properly

appointed (agent’s responsibility for sub-agent and sub-
agents responsibility to principal except in case of fraud or
willful wrong.
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S: 193 – Agent responsibility for sub-agent appointed
without authority –the principal is not liable to the third
party. (Agent responsible to principal and third party, but
when principal ratify see u/s: 196-200 then principle will be
held responsible)
S: 194 – Relation between principal and person duly
appointed by an agent to act in the business of agency
(person who is not a sub-agent)
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Example: A directs B, his solicitor, to sell his estate by
auction and to employ an auctioneer for the purpose. B
names C, auctioneer, to conduct the sale. C is not a sub-
agent but is A’s agent for the conduct of the sale.
S: 195 – Agent’s duty in naming such person (and has
discretion as a man of ordinary prudence would exercise in
his own business)
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Example:
A instructs B, a merchant, to buy a ship for him. B employs as ship
surveyor of good reputation to choose a ship for A. The surveyor
makes a choice negligently, and the ship turns out to be
unseaworthy and is lost. B is not, but the surveyor is liable to A.
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Ratification SS: 196-200 of the Contract Act, 1872
S: 196 – an act done without the authority of principal – later may
ratify it or disown such act.
Condition of Ratification:
i) The act must have been done on behalf of another;
ii) The act must have been done without knowledge or authority of the
person on whose behalf the act is done;
Legal effect of ratification:
What act cannot be ratified? An act which is void ab initio…
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S: 197 – Ratification may be expressed and implied
Example,
A, without B’ authority, lends B’s money to C. Afterwards B accepts
interest on the money from C. B’s conduct implies a ratification of the
loan.

S: 198 – Knowledge requisite for valid ratification

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S: 199 – Effect of ratifying unauthorized act forming

part of a transaction (only a part can not ratify)
S: 200 – Ratification of an unauthorized act cannot
injure the third person
Example:
A holds a lease from B, terminable on three months’
notice. C an unauthorized person gives notice of
termination to A. the notice cannot be ratified by B, so
as to be binding on A.
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Revocation of and renunciation Authority SS: 201-210
of the Contract Act, 1872
S: 201 – Termination of agency
Various modes of termination of agency-
i) by the principal revoking the authority (See SS:
202-204) ( by notice of revocation);
ii) by the agent renunciation the business of agency
(See SS: 206-207) ( by notice of renunciation);
iii) by the completion of the business of agency-